["Review of Development Economics, EarlyView. ", "\nABSTRACT\nReducing household consumption inequality (HCI) is crucial for inclusive development and social cohesion, yet existing research has largely examined isolated digital factors such as e‐commerce and digital finance while overlooking the fundamental supply‐side technological shift represented by Digital‐Real Technological Integration (DRTI)—the fusion of digital knowledge into real‐economy sectors. This study investigates the impact of DRTI on HCI in China. We develop a framework positing that DRTI influences HCI through direct resource reallocation and indirect behavioral adaptation. Employing a household‐city‐year panel dataset from the China Household Finance Survey (2014–2020) merged with city‐level patent citation data, we measure DRTI through directed knowledge flows from digital to real sectors and HCI using the Kakwani index. Our empirical strategy utilizes a two‐way fixed effects model with instrumental variable estimation. The results demonstrate that DRTI significantly narrows HCI. Mechanism tests confirm that this equalizing effect operates through narrowing income inequality, reducing precautionary savings, diversifying consumption channels, and enhancing market accessibility. Heterogeneity analysis reveals stronger effects for higher‐income households, in higher‐tier cities, and for subsistence consumption. This study provides micro‐econometric evidence linking supply‐side technological fusion to consumption distribution, offering a unified analytical framework and policy insights for promoting inclusive growth in the digital era.\n"]